The Douglas County School District and the charter school face a June 30 deadline to reach a new contract. The district had offered STEM a three-year contract in January, and STEM appealed to the Colorado Department of Education to grant it a five-year contract in February.

At a meeting Tuesday night, the board discussed extending the school’s existing contract by only one year due to concerns about security in the wake of the shooting, but set that idea aside after parents protested.

In a Jan. 21 email to the Douglas County school board’s members, STEM board member Roy Martinez argued that a three-year contract is a “red flag” to bond rating agencies, which try to assess how likely a school, business or other organization is to repay its debts.

Standard & Poor’s gave the school a BB+ rating after the district gave it a three-year contract in 2014, putting it at the better end of speculative bonds — what some people call junk bonds. When a borrower has a junk rating, investors still will buy their bonds, but they demand high interest rates to compensate them for taking on a riskier borrower.

The three-year contract was extended by two years in 2017.

STEM will need to issue $15 million in bonds in the near future to buy the elementary school building it currently leases, to make improvements to facilities and to refinance some existing debt, Martinez said in the email to the board. An investment banker the school consulted estimated it would pay about $4.9 million in extra interest because of the low rating over 35 years, and about $562,000 extra in the first three years, he said.

“It is grossly unfair to penalize the students and faculty of a school that exemplifies the best that DCSD has to offer,” Martinez wrote.

At the Tuesday meeting, Douglas County school board secretary Krista Holtzmann said she had reservations about a five-year contract even before the shooting, because STEM hadn’t addressed a pattern of complaints related to special education. In a letter sent in May 2018 from the district board to the STEM board, the district reported it knew of eight complaints to either federal or state education officials.

“I’m not sure what the leaders of STEM expected,” she said. “We have to have cooperation from the leadership of the school.”

Tess Pautler, a mother of a STEM student, blamed a few disgruntled parents who complained to the district, as did many members of the public who spoke at the board’s most recent meeting. She told the board that its plan to offer only a short-term contract would hurt the district financially, and in terms of morale and enrollment.

“STEM is already doing things right,” she said. “The only failure is your failure to stand up to the cowardly anonymous callers.”

When STEM appealed to the state, it raised two issues in addition to the shorter contract, though neither got much attention Tuesday night. The other issues it objected to in the three-year contract were a requirement that STEM use the same open enrollment system other Douglas County schools use, and a prohibition on using per-pupil dollars to finance the creation of new schools in different districts.

State law allows the Colorado State Board of Education to send a district’s decision back for reconsideration if it believes conditions in a charter contract are “contrary to the best interest of pupils, school district or community.”

Related Articles

Changing the enrollment system would eliminate the ability to give preferences to siblings of current STEM students and children of STEM employees, the school said in its appeal. It also would get rid of multiyear waiting lists, meaning students who aren’t admitted would have to put their names in again for the next year.

“As a charter school, the school’s funding model depends upon enrollment and disruption of the school’s longstanding enrollment system could cause confusion and an unnecessary reduction in enrollment, and thus funding, for a highly successful and popular educational option for parents and students,” STEM School leaders wrote in their appeal.

It isn’t clear if the district and the school will be able to find common ground on any of the three issues. If they can’t reach an agreement before the June 30 deadline, the board raised the possibility of a one-year extension to allow negotiations to continue.

A special board meeting has been scheduled for 1:30 p.m. Saturday. The agenda isn’t yet available, but board members had floated that Saturday as one possible date to discuss STEM’s future.

Meg Wingerter came to Denver from The Oklahoman in Oklahoma City, where she covered health. She previously worked at Kansas News Service, The Topeka (Kansas) Capital-Journal and The Muskegon (Michigan) Chronicle. She grew up in Pennsylvania and attended Michigan State University.

The head of the Denver teachers union says a vote to end refunds under the Taxpayers Bill of Rights could help address excessive heat in city schools without air conditioning -- but teachers will need a variety of smaller solutions in the short term.